Mercedes-Benz has invested €1 billion (USD 1.14 billion) to expand its manufacturing facility in Kecskemet, Hungary, doubling production capacity and creating 3,000 new jobs as the German carmaker strengthens its global production network.
The expanded facility will manufacture the new electric C-Class and become Mercedes-Benz’s largest production plant in Europe and its second-largest globally. The company said the investment will provide greater flexibility to respond to changing market demand and intensifying competition around technology and costs.
According to the Hungarian government, annual production capacity at the facility will increase to 350,000 vehicles. Mercedes-Benz employed nearly 5,200 people in Kecskemet at the end of May.
The expansion will also bring production of additional electric models to the facility. Mercedes-Benz plans to manufacture the electric GLC and the small G-Class at the Kecskemet plant.
Mercedes-Benz CEO Ola Kallenius said local production of key components, including batteries, would allow the company to respond more quickly and flexibly to market demand.
“By locally producing key components such as batteries, we can respond to the demand even faster and more flexibly,” Kallenius said, describing Kecskemet as a key location for the company’s future manufacturing strategy.
Mercedes-Benz Board Member for Production Michael Schiebe said the carmaker plans to establish flexible production links between the Kecskemet facility and its German manufacturing operations.
The approach will enable the company to shift production across locations based on market demand and external conditions, strengthening the resilience of its global manufacturing network.
Hungarian Prime Minister Peter Magyar, who attended the opening ceremony for the expanded facility, said his government aims to provide a predictable business environment for foreign investors.
Magyar said the government intends to maintain its strategic partnership with Mercedes-Benz and other companies investing in Hungary while expecting businesses to comply with regulations, ensure safe working conditions and provide employees with salaries that support a secure livelihood.
Hungary has emerged as an important European manufacturing hub for the automotive and electric vehicle battery industries, attracting investments from German carmakers and Chinese battery manufacturers.
The latest expansion strengthens Mercedes-Benz’s manufacturing presence in the country as the company increases production flexibility and expands its electric vehicle portfolio.